As we have informed in our earlier posting let us describe about Index as well. Whenever we speak about any Market in the world we are also used speak about the INDEX otherwise called INDICES

What does it mean and how it is derived?

As far as Indian Share markets are concerned, there are two important index numbers. One is called SENSEX and other one is NIFTY. SENSEX stands for SENSITIVE INDEX and NIFTY stands for NATIONAL STOCK EXCHANGE IN FIFTY.

SENSEX:

There are more than 5000 companies listed here. But all the shares of all the Stocks are not taking place in the market during the Intraday Trading. So they have selected 30 important companies to derive the Index figures. This method was adopted in the year 1987. We offer you below few companies which were taken. RIL, Infosys, ITC, ICICI Bank, BHEL, L&T, HUL, HDFC, ONGC, Bharti Airtel and so on. Sensex Index figures are nothing but the average numbers of thirty stocks.

NIFTY:

In the same way NIFTY is calculated with 50 companies. Moreover, the stock which is in the Sensex can be also listed in the NIFTY.

INTERESTING INFORMATIONS:

In the month of December 2006, NIFTY and SENSEX was flying in the sky like rocket and it has gained its maximum numbers. But the same indexes were crawling in the bottom during the month of OCT. 2005. At this point of time, FED RATE was raised by America and that made us to panic because FOREIGN INSTITUITIONAL INVESTORS (FII) may ouster from Indian Markets. Not only that, Crude oil Price has gone high and also Inflation was too much worldwide. You will happen to hear only lullaby wherever you turn.

All these factors have joined its hands together and pulled down SENSEX by 800 points and many of the investors lost huge money. In view of this Investors were freightened . But just after a month ie Nov. 2005, the total scenario have changed and it has once again started flying in the sky to 9000 points. FIIs are the only giants made it happened.

Let us discuss about FIIs and who are they in the next segment please.

In continuation to our earlier posting, we like to describe more about the Stock Market Trading Strategy.

We must know and understand, most importantly fix up our capacity to bear the loss if anything occurs during the trading because of wrong entry. Also, there will be unforeseen scenes happened for eg. its like day will come first following to that night will be coming similarly we can see huge profit and sometime we may happened to see huge loss even like TSUNAMI occasionally.

During that point of time, we must have enough money in our account to buy a new scrip or to average in the same stock if you really feel worthy. Otherwise we will be landing in the deep distress and also you will have to be waiting for even years of years. So, people those who are really having the surplus money should come to market for Trading/Investing especially you should not plan any of the commitments with the money which was invested in the market.

Most of the times, we are not coming forward to sell the shares when it is in the profit of more than 20%. It is also not a good strategy. They must atleast book a partial profit because sometime it may comedown like anything as everything is possible to happen in the market especially it will not give you any clue or whatsoever about its big decline.

In the next segment, let us discuss about the Index and its calculation and how it is useful to us.

There was a survey conducted worldwide by Americans especially for the period of 100 years (1896 - 1996) about the High Returns from the investments. As everyone is well aware that there are so many types of investment plans all over the world eg. Stock Markets, Debentures, Gold Government Bonds and Treasury Bills likewise. Investments in the Share Market and Debentures have given high level yieldings than all others.

WHO CAN SHINE IN THE SHARE MARKETS?

Everyone can not shine in all the business. Everyone is differed by their perspective and brilliant in various fields. In order to achieve in their own field, atmosphere is the main cause and their dedication to their work.

As far as Stock Market is concerned, it may not be suitable for everyone who is capable to invest in the market. They must know first what it is and then they will have to start learning about its movement and how it functions. Apart from all these things, they must understand who is involved in the market. What is their strength and ability?, What is their disability, When are they entering the market?, When are they planning to exit the market, Why are they making their exit? What will happen when they all exit from the market at a time? and finally What should we do during that point of time?.

Above asked questions may be looking very simple but if anyone finds the answer before they enter and invest in the market, there is no doubt that they will have all fortunes to become a millionaire. We should not buy any stock just like that. We must do research on a particular stock with the available materials as far as possible.

SHARE MARKET - DEFINITION

There are so many ways and methods in the Share Market to make good amount of money as profit. But the people those who are really trying to make the money within the shortest period is really landing in the trouble. It is not at all a Gambling from Experts point of view and Gambling is not the way to make money to run one's life because it paves way to lose. We are used to call it as a "SPECULATION BUSINESS" and taking high risk is the high reward in our industry.

WHAT IS SPECULATION?

For an example, if any news leaked out that there is a conflict between Corporate Company's Directors, we can see a big slide in their group of companies. In that case, we must Sell or Short Sell those companies' stocks in the first place. Similarly, If Central Government's budget is favourable to some sectors, you must be the first one to initiate the buying action. Your loss will be beyond your imagination if you do it against the speculation.

There may be many ways but remarkable methods are only two. What are those? i) INVESTMENT and ii) TRADING.

WHAT IS TRADING?

Trading is nothing but buying the Shares on dip and Selling the same at high. But buying shares at the right time will increase your profit amount, otherwise there will be only a meagre amount as profit. But many of us is buying when it is trading in the high rate believing that it will go further up. Rather doing that you must become heedful to the Market Experts and Analysts and what they are actually trying to suggest us about this particular stock. When you do like that, first of all, you will not lose your capital money, secondly there will be a sizeable income. Most importantly, it will be called as a Confirmed Trading, on the contrary it would be called as a Speculation Trading.

WHAT IS INVESTMENT?

Savings of money is very important for every man. Deposit of the same for few years will be doubled especially your capital amount is preserved and also there is going to be a constant returns. This is called Investment. But there is no guarantee both for your Capital and Returns in the share market just unlike Fixed Deposits (FD), National Saving Scheme (NSC) and Kissan Vikas Patra (KVP). Apart from this, some other method of Investment system is Gold Investment and Land. Here you do not need to bother too much but if you invest it in the stock markets, you must be always watching it very closely otherwise loss will be huge.